Buying a home via land contract?

[lendaddy]

I know the basics, but are there any hidden tips, tricks or pitfalls? Is the interest still totally deductible for instance?

[Dantilla]

Hard to give specific answers without specific questions.

The cheapest money you will spend on something like this is an hour of an attorney's time to make sure there aren't any hidden tips, tricks or pitfalls.

[p911dad]

You don't actually own the property, you will have a contract to purchase and make periodic payments to the owner, who pledges to give you the deed when all the contract terms are met. If you miss payments, the owner can cancel the contract as per the terms and you are out the payments you have made and out on the street. It has a place in real estate, but is not a situation I would want to be part of. It used to be somewhat popular around these parts as a way to sell the less desirable properties to individuals that had no or very small downpayments.

[lendaddy]

I am just thinking ahead a bit given my situation.

[p911dad]

My reading comprehension is apparently fading.. I am no tax authority, but I believe you as the buyer can deduct the interest you pay on the land contract on your income taxes, and you can most likely also deduct the local property taxes if you are the one that directly pays them. It is a good idea to record the contract at the County Clerk's office or whatever you call that recorder's office where you live.

[lendaddy]

Thanks,

The specifics are...there are no specifics. I pitched it to the seller as a what if and they are getting back to me. they own the home outright and I told them I would work up a ballpark contract to start the negotiation if there was "any" interest. In the event they are interested I was just looking for common mistakes, missed details, etc... It's all just theoretical at this point.

[p911dad]

If you end up buying it through a land contract, as was stated above, get a local lawyer to represent you, and make sure you end up with good title with no liens, back taxes owed, etc., and that you are in fact dealing with the actual owners. If you really want to do it yourself, you can probably find Michigan forms in your local Stationer's store or office supply, and go the Clerk's office and run the title yourself(it is possible), and check the Lis Pendens for any liens, and the mortgage books for any outstanding mortgages(old ones will show up as being "satisfied").

[lendaddy]

Thanks, good info.